The United States Department of Defense has placed BYD and Alibaba on the Pentagon’s Section 1260H list of companies alleged to have ties to the Chinese military, a move that puts the BYD Pentagon military list at the centre of deepening economic friction between Washington and Beijing. The listing was announced in a post on the Federal Register on Monday.
The Section 1260H list names more than 80 Chinese companies described as directly or indirectly engaged in providing commercial services in the United States. Inclusion on the list does not trigger immediate sanctions, but it is designed to alert American organisations to the risks of doing business with the named firms.
Among the companies named are Alibaba, BYD, and technology company Baidu, which were accused of serving as military-civil contributors to Chinese defence operations. Electric car maker Nio and aircraft manufacturer Comac also appear. Companies including Tencent, Huawei, drone producer DJI, and battery maker CATL, which were added in prior iterations, remain on the list.
Seventeen new additions as three entities removed
According to Akin Gump, the updated list adds 17 new entities while removing three from the prior version, marking one of the more substantive revisions to the register in recent cycles. The net expansion of the list signals that the Pentagon’s scrutiny of Chinese commercial activity in the United States continues to widen rather than narrow.
CNBC reports that listed companies are deemed to be affiliated with China’s State-owned Assets Supervision and Administration Commission, and are designated as “military-civil fusion” contributors to China’s defence industrial base through ties to the Ministry of Industry and Information Technology. That framing matters: it suggests companies are being flagged for participation in state programmes rather than on the basis of direct contracts with the Chinese military. Policy analyst Stefanie Kam from the Nanyang Technological University made that same point, saying the US appears to have flagged these companies for their participation in state programmes rather than based on clear evidence of contracts with the Chinese military.
BYD Pentagon military list entry draws attention to EV rivalry
BYD’s inclusion is particularly pointed given its position in the global electric vehicle market. BYD, which does not export its cars to the United States, surpassed Tesla earlier this year to become the world’s top EV maker. The listing places it alongside firms that compete directly with American companies across electric vehicles and artificial intelligence, underlining the industrial dimension of the dispute.
Beijing is likely to view the move as a form of economic containment, Kam said. She added that China could possibly retaliate with tit-for-tat sanctions, add American firms to a list of its own, or respond with some form of diplomatic pushback.
The Chinese embassy in the US told the BBC that the list is “discriminatory” and that firms from China have strictly complied with laws abroad. Alibaba’s spokesperson said the firm is “not a Chinese military company nor part of any military-civil fusion strategy” and stated: ‘We will take all available legal action against attempts to misrepresent our company.’ A Baidu spokesperson said there is ‘no credible justification’ for its inclusion and that it will ‘use all options available’ to have its name struck off. The BBC contacted BYD and several other firms on the list for comment.
The Section 1260H list has teeth by association even where direct sanctions do not follow. In 2019, Washington barred US firms from doing business with Huawei over national security concerns linked to its equipment. Huawei has denied claims that using its products presents security risks and says it is independent from the Chinese government. The precedent set by that 2019 action means that placement on the Section 1260H list, even without equivalent prohibitions attached, carries commercial and reputational weight for every firm named on Monday.
